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While youre waiting, check out some upcoming CDFA events CDFA: - - PowerPoint PPT Presentation

Aug 31, 2022 227 likes •790 views

CDFA Financing Roundtable Webcast Georgia vs. Texas: TAD vs. TIRZ: Which Model for Redevelopment is Better? The Broadcast will begin at 1:00pm CST (2:00pm EST). While youre waiting, check out some upcoming CDFA events CDFA: Advancing

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CDFA: Advancing Development Finance Knowledge, Networks & Innovation www.cdfa.net

CDFA Financing Roundtable Webcast Georgia vs. Texas: TAD vs. TIRZ: Which Model for Redevelopment is Better? The Broadcast will begin at 1:00pm CST (2:00pm EST).

While you’re waiting, check out some upcoming CDFA events…

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CDFA: Advancing Development Finance Knowledge, Networks & Innovation www.cdfa.net

TAD vs. TIRZ: Which Model for Redevelopment is Better?

Kurt Dieringer

State Programs Coordinator Council of Development Finance Agencies Columbus, OH

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CDFA: Advancing Development Finance Knowledge, Networks & Innovation www.cdfa.net

Using your telephone will give you better audio quality. Submit your questions to the panelists here.

Want to watch again? You will find a recording of this webcast, as well as all previous CDFA webcasts, in the Online Resource Database at www.cdfa.net.

TAD vs. TIRZ: Which Model for Redevelopment is Better?

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CDFA: Advancing Development Finance Knowledge, Networks & Innovation www.cdfa.net

Tax Increment Finance Resources Check this out for case studies, state-by-state comparison, reports and analysis, and other resources. Receive up-to-date news and information on TIF by subscribing to the Tax Increment Finance Update.

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CDFA: Advancing Development Finance Knowledge, Networks & Innovation www.cdfa.net

Speakers

Amanda Rhein Metropolitan Atlanta Rapid Transit Authority (MARTA) Sue Hounsel City of Dallas Office of Economic Development

TAD vs. TIRZ: Which Model for Redevelopment is Better?

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CDFA: Advancing Development Finance Knowledge, Networks & Innovation www.cdfa.net

Kurt Dieringer

State Programs Coordinator Council of Development Finance Agencies Columbus, OH

Are you a CDFA Member?

Members receive exclusive access to thousands of resources in the CDFA Online Resource Database. Join today at www.cdfa.net to set-up your unique login.

TAD vs. TIRZ: Which Model for Redevelopment is Better?

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CDFA: Advancing Development Finance Knowledge, Networks & Innovation www.cdfa.net

Amanda Rhein

Senior Director of Transit Oriented Development Metropolitan Atlanta Rapid Transit Authority Atlanta, GA

Need assistance with your development finance programs? Consider CDFA’s Research & Advisory Services –

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assistance for all of your development finance

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TAD vs. TIRZ: Which Model for Redevelopment is Better?

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GA vs. TX: TAD vs. TIRZ - Which Model for Redevelopment is Better?

March 5, 2014

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Our Vision is to make Atlanta the most economically dynamic and competitive city in the world.

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Invest Atlanta

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What is a TAD?

  • One of the City’s most important economic incentive tools
  • Creates incentive for development that would otherwise not occur
  • Tax increment financing (TIF) is a tool used to publicly finance

certain redevelopment activities in underdeveloped or blighted areas

  • Locally, TAD creation results from legislation passed by the City,

County, and Atlanta Public Schools

  • The tax base within a specified geographical area is set as of the

effective date of the TAD creation

  • TADs attract private investment which results in increased

development, new jobs, reduced crime and greater economic vitality

  • New development within the TAD increases property values and

thereby increases tax revenue

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What is a TAD?

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City of Atlanta TADs

  • 10 tax allocation districts
  • To date, approximately $580

million in TAD bonds have provided gap financing for

  • ver $3.5 billion in private

development

  • Assessed property values in

TADs have grown 20% since 1998 while City of Atlanta has grown at 5%

  • Incentivize development in

blighted and underdeveloped areas of City

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Westside TAD

  • Established in 1992, expanded in 1998 to leverage

momentum from 1996 Olympics to redevelop Downtown

– Connect neighborhood assets – Create live-work-play community surrounding Centennial Olympic Park – Redevelop blighted residential neighborhoods west of Downtown

  • 3 bond issues totaling: $161.3 million

– Allocations to Neighborhood Fund and Public Purpose Project Fund

  • Base Assessed Value: $270,693,404
  • 2013 Assessed Value: $606,680,530
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Westside TAD: The Ellis

Before After

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Atlantic Station TAD

  • Created in 1999 to facilitate environmental

remediation and redevelopment of 138-acre brownfield site

  • Atlantic Station mixed-use community to include: 1.6

million s.f. of retail, 6 million s.f. office and entertainment space, over 4,000 residential units, 1,150 hotel rooms, and create 30,000 new jobs

  • $76.5 million bond issue in 2001; $166.5 million

second funding in 2006

  • Base Assessed Value: $7,193,480
  • 2013 Assessed Value: $384,558,420
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Atlantic Station TAD

Before After After

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Eastside TAD

  • Established in 2003 to spur the creation of an

attractive, walkable, bustling 24-hour downtown

  • 2005 Bond Issue ($47.5 million) supported: 1,900

housing units, 150,000 sf of retail, 250,000 sf of office space and over 100 hotel rooms

  • 20% affordable housing requirement
  • Base Assessed Value: $299,727,400
  • 2013 Assessed Value: $569,024,720
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Eastside TAD: Renaissance Walk

Before After

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Perry Bolton TAD

  • Established in 2002 to assist in redevelopment of

Atlanta Housing Authority’s Perry Homes and revitalization of surrounding area

  • 2014 Bond Issue ($21 million) supported: the

construction of over 650 single-family homes, 700 apartments and new parks and trails

  • $4 million allocation for construction of Fire Station

28

  • 20% affordable housing requirement
  • Base Assessed Value: $66,022,880
  • 2013 Assessed Value: $140,320,780
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Perry Bolton TAD: West Highlands

Before After

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Princeton Lakes TAD

  • Established in 2002 to support necessary infrastructure

improvements

  • 2006 Bond Issue ($21 million) supported: mixed-use development

with 90,000 s.f. of office space, 378,000 s.f. of retail and restaurants, 450 townhomes, 350 apartments and 700 detached single-family homes.

  • Base Assessed Value: $826,760
  • 2013 Assessed Value: $102,695,580
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BeltLine TAD

  • 22 mile loop around City
  • 6,500 acres: ~8% of total City land area
  • TAD bonds will fund infrastructure and improvements for public

benefit:

– Parks: 1,200 new acres of parks and greenways – Paths: 33 miles of trails – Public transportation

  • The BeltLine TAD functions somewhat differently from Atlanta’s
  • ther TADs

– Other TAD bond proceeds used primarily as developer incentive – The improved BeltLine public infrastructure will serve as the economic development incentive

  • Base Assessed Value: $542,867,760
  • 2013 Assessed Value: $1,049,311,470
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BeltLine TAD: Historic Fourth Ward Park

After Before

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Commercial TADs

  • Established in 2005 to attract

private investment to spur catalytic mixed-use, economically-viable development and create jobs in key nodes throughout historic commercial corridors

  • Pay-as-you-go financing

mechanism: alternative to bonds, which require larger projects (multiple $10M+ projects in a typical Bond Issuance of $50M of more)

  • Developer responsible for

providing up-front financing and reimbursed as increment is collected

Hollowell/ML King Campbellton Road Metropolitan Parkway Stadium Neighborhoods

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Metropolitan Parkway TAD: EUE/Screen Gems

Before After

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Campbellton Road TAD: Everest College

Before After

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TAD Strategic Review

  • Methodology and deliverables:

– Assessment of historical performance – Examination of best practices among competitor cities – Recommended strategy to focus resources and best reposition program

  • Goals moving forward:

– Collaboration with City and regional stakeholders to maximize TAD impact on economic development – Reinforce City of Atlanta’s emerging economic development strategy

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TAD Strategic Review: Findings & Recommendations

  • Project selection: evaluate projects based on

economic development criteria in addition to financial criteria

  • Funding strategy: utilize a broader range of funding

tools more strategically and leverage additional non- TAD funding resources

  • TAD organizational structure: increase capacity to
  • riginate, monitor and assist investments over the

long-term

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CDFA: Advancing Development Finance Knowledge, Networks & Innovation www.cdfa.net

What are you reading these days? Your development finance toolbox isn’t complete without a set of CDFA reference guides. CDFA Members save 15% or more on every purchase. Order today at www.cdfa.net.

TAD vs. TIRZ: Which Model for Redevelopment is Better?

Sue Hounsel

Senior Coordinator Dallas Office of Economic Development Dallas, TX

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1 Office of Economic Development WWW.DALLAS-ECODEV.ORG

City of Dallas – a Texas Model for Tax Increment Financing (TIF) Districts

CDFA Webcast Georgia vs. Texas TAD vs. TIRZ March 5, 2014

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2 Office of Economic Development WWW.DALLAS-ECODEV.ORG

Overview

The purpose of this presentation is to provide:

An overview of Texas procedures for TIF Districts Comparisons with Georgia (based on Atlanta’s program). City of Dallas TIF program and creation of proactive policy Summary of Dallas TIF performance.

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3 Office of Economic Development WWW.DALLAS-ECODEV.ORG

Texas procedures for TIF Districts

State enabling legislation varies across the country in terms of TIF criteria and legal requirements. Chapter 311 of the Texas Tax Code (“the Act”) is the governing statute for tax increment reinvestment zones (TIRZ) in Texas or more commonly known as TIF districts. The Act has evolved in terms of more streamlined procedures and flexibility for taxing jurisdiction participation. The Texas legislature meets every odd year and often amends the Act each session. Similar to other states including Georgia, there needs to be a finding that the area of a proposed TIF district substantially arrests or impairs the sound growth of the City, retards the provision of housing, or constitutes an economic or social liability.

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4 Office of Economic Development WWW.DALLAS-ECODEV.ORG

Texas procedures for TIF Districts con’t

The Act outlines basic criteria for:

Creation of a TIF district including a preliminary plan and public hearing/notice requirements. Provisions for taxing entity financial participation in the TIF are detailed and participation levels are now completely negotiable. TIF Board of Directors composition which is now limited to appointees from the City that designated the TIF and taxing jurisdictions that commit to contributing some portion of tax increment to the district. Procedures for the final TIF Plan and increment collection. Annual financial reporting to the other taxing entities and the state comptroller.

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5 Office of Economic Development WWW.DALLAS-ECODEV.ORG

Comparisons between Georgia & Texas

The Georgia Redevelopment Powers Law (GA Law) enables the creation of tax allocation districts (TADs), the same tool commonly called tax increment financing (TIF) districts. How are districts initiated in Georgia vs. Texas?

Georgia presumes a redevelopment agency initiates the creation of a TAD, unless a City designates itself as the respective agency. Invest Atlanta is the redevelopment agent for all the TADs created by the City of Atlanta. Texas allows a City or County to initiate a TIF district but also has a provision for property owner petition initiated TIF districts. (creation subject to approval by the City or County). With one exception, all of the Dallas TIF districts have been initiated by the City. The City of Dallas has retained control of all its TIF districts. The City of Houston has opted to create redevelopment authorities (local government corporations) to act on behalf of the City for most of its tax increment reinvestment zones (TIRZ).

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6 Office of Economic Development WWW.DALLAS-ECODEV.ORG

Comparisons between Georgia & Texas

How are districts governed?

Georgia redevelopment authorities such as Invest Atlanta have a board of directors and optional community advisory boards. Texas provides that the City or County that creates the district establish a board of directors including its own representatives and one member for other taxing entities that have committed some portion of tax increment. In Dallas, TIF Boards are advisory to the City Council and typically have 6 to 9 members. Most districts created since 2005 only have Dallas County as the other representative.

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7 Office of Economic Development WWW.DALLAS-ECODEV.ORG

Comparisons between Georgia & Texas

Is there a limit on the number of TIFs or TADs that can be created?

Georgia limits TAD designation to no more than 10% of the City’s total tax value. Atlanta has met its limit on TADs. Texas limits TIF designation to no more than 25% of a City’s taxable real property base. The City of Dallas has a self imposed limit of 10% of its total tax base for both TIFs and tax abatement reinvestment zones. Dallas is currently below both limits with significant capacity to create more TIF districts.

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8 Office of Economic Development WWW.DALLAS-ECODEV.ORG

Comparisons between Georgia & Texas

Do taxing entities have a choice in contributing tax increment?

In Georgia, taxing entities may choose whether to participate. However, if they opt to - all of the new tax increment is

  • contributed. To offset some of the real or perceived service

burdens, payments in lieu of taxes (PILOT) have been made to taxing entities. In Texas, taxing entity participation is now completely

  • negotiable. For most Dallas TIF districts, City participation

ranges from 70-90% and Dallas County from 55-75%.

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9 Office of Economic Development WWW.DALLAS-ECODEV.ORG

Comparisons between Georgia & Texas

Are any private development costs eligible for funding?

In Georgia, TAD funds can be used for new construction and renovation/rehabilitation of private buildings along with demolition and clearing/grading of land. In Texas, demolition, environmental remediation, and façade preservation of private buildings is eligible. TIF funding can also be in the form of economic development grants or loans pursuant to adoption of a specific program. On a limited basis, Dallas has pledged TIF funds in the form

  • f grants to offset private costs such as structured parking

to facilitate higher density development.

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10 Office of Economic Development WWW.DALLAS-ECODEV.ORG

Comparisons between Georgia & Texas

Issuing bonds vs. developer “pay-as-you-go” basis?

Both states allow for the issuance of bonds or notes based using incremental revenue to pay for project costs. Atlanta has issued $410 million in TAD bonds since 2001 along with some developer “pay-as-you-go” agreements particularly in newer districts. Dallas has financed the vast majority of its TIF district projects on a “pay-as-you-go” basis with developers being reimbursed from available TIF funds with no obligation to the City general fund. Only two TIF related bond sales have occurred including the Downtown Connection TIF early on to support the Mercantile block catalyst project. The Cityplace Area TIF had a bond sale after 5-7 years of strong TIF revenue.

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11 Office of Economic Development WWW.DALLAS-ECODEV.ORG

TIF Program

The City of Dallas currently has 17 active TIF Districts (the first two districts State- Thomas and Cityplace have sunset).

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12 Office of Economic Development WWW.DALLAS-ECODEV.ORG

TIF Program continued

The program began in 1988 and the first seven districts created were in downtown and adjacent neighborhoods. In 2005, under new City Council adopted criteria, the program began expanding to include other strategic redevelopment areas many with existing or planned DART light rail stations.

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13 Office of Economic Development WWW.DALLAS-ECODEV.ORG

TIF Program continued

Proposals for new TIF districts, under the adopted criteria, are evaluated on:

  • Financial performance –
  • taxes generated exceed taxes foregone;
  • financial participation by other taxing entities;
  • incentives needed to make project feasible (review of pro formas); and
  • minimum of $100 million investment planned within 5 years
  • Public policy initiatives – The proposed TIF plan provides for:
  • mixed-income housing,
  • strong urban design,
  • preferential hiring to neighborhood residents,
  • enhancement of other public investments and core assets of the City of

Dallas,

  • benefits in distressed areas,
  • park/trail/green space, and
  • M/WBE business hiring
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14 Office of Economic Development WWW.DALLAS-ECODEV.ORG

TIF Program continued

TIF districts are geared toward improving the real estate market at a district level. Districts created since 2005, require at least one planned catalyst project in the first five years. TIF incentives reimburse developers for public infrastructure and other eligible costs. To a limited extent, TIF incentives have been in the form of economic development “grants” to offset other costs such as structured parking.

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15 Office of Economic Development WWW.DALLAS-ECODEV.ORG

Dallas TIF performance

As of 2013, overall property values have grown 140% ($4.5 billion) cumulatively over the total of the base values for the districts. Total TIF expenditures or allocations of $923 million leveraged

  • ver $7 billion in added or anticipated property value in TIF
  • Districts. For every TIF dollar committed, on average $8 was

returned in private investment. This return does not include increased sales tax, hotel/motel taxes and personal property taxes, nor does it include the taxes paid to the various taxing jurisdictions, including the Dallas Independent School District (DISD). Staff estimates additional taxes paid to DISD for increased property value in Dallas TIF Districts is over $58 million for the fiscal year 2013.

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16 Office of Economic Development WWW.DALLAS-ECODEV.ORG

Dallas TIF performance continued

To date, approximately 20,768 new residential units were completed in the City’s nineteen TIF Districts (including State-Thomas and Cityplace), an additional 6,439 are under construction, and another 6,706 units are planned.

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17 Office of Economic Development WWW.DALLAS-ECODEV.ORG

Dallas TIF performance continued

Over 6.8 million square feet of new or redeveloped retail, office, and other commercial space has been

  • completed. Over 1 million square feet
  • f commercial space is under

construction and another 4.8 million square feet of space is planned. New hotel construction includes 3,277 completed rooms, 306 under construction and another 951 rooms planned.

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18 Office of Economic Development WWW.DALLAS-ECODEV.ORG

Dallas TIF performance continued

TIF funds, often matched with other sources, have assisted in funding general public enhancements with an emphasis on quality urban design.

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19 Office of Economic Development WWW.DALLAS-ECODEV.ORG

Dallas TIF performance continued

The TIF program has leveraged other tools to assist projects including:

Targeting City general obligation bond program funds to strategic areas and allowing a portion to be used for economic development grants. North Central Texas Council of Governments (NCTCOG) Sustainable Development Grant Program. New market tax credit (NMTC) program City of Dallas Regional Center (CDRC), EB-5 Foreign Investor program HUD Section 108 and 224(d)(4) loan programs

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20 Office of Economic Development WWW.DALLAS-ECODEV.ORG

Additional Information

For additional information on all the Dallas TIF

districts including individual maps, plans, and annual reports see the website link below: http://www.dallas-ecodev.org/incentives/tifs-pids/

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CDFA: Advancing Development Finance Knowledge, Networks & Innovation www.cdfa.net

Audience Questions

To ask a question, look for the question box in the GoToWebinar control panel.

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CDFA: Advancing Development Finance Knowledge, Networks & Innovation www.cdfa.net

Upcoming Events

April 8, 2014 CDFA Texas Financing Roundtable Conference Austin, TX Register Today!

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CDFA: Advancing Development Finance Knowledge, Networks & Innovation www.cdfa.net

Upcoming Events

June 4, 2014 CDFA Georgia Financing Roundtable Conference Atlanta, GA Register Today! Annual Roundtable Sponsors:

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CDFA: Advancing Development Finance Knowledge, Networks & Innovation www.cdfa.net

Upcoming Webcasts

CDFA // BNY Mellon Development Finance Webcast Series Topic: Compliance, Evaluation & Sound Decisions for Smart Incentives Tuesday, March 18, 2014 1:00pm (EDT)

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CDFA: Advancing Development Finance Knowledge, Networks & Innovation www.cdfa.net

Upcoming Events

Intro Bond Finance WebCourse Daily: 12-5pm (EDT) April 30-May 1, 2014 Intro Food Systems Finance WebCourse Daily: 12-5pm (EDT) June 4-5, 2014 Register online at www.cdfa.net